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POLITICO 44

Goldman Sachs is launching an aggressive response to its political and legal challenges with an unlikely ally at its side — President Barack Obama’s former White House counsel, Gregory Craig.

The beleaguered Wall Street bank hired Craig — now in private practice at Skadden, Arps, Slate, Meagher & Flom — in recent weeks to help in navigate the halls of power in Washington, a source familiar with the firm told POLITICO.

“He is clearly an attorney of eminence and has a deep understanding of the legal process and the world of Washington,” the source said. “And those are important worlds for everybody in finance right now.”

They’re particularly important for Goldman.

On Friday, the SEC charged the firm with securities fraud in a convoluted subprime mortgage deal that took place before the collapse of the housing market. Next week, Goldman Sachs CEO Lloyd Blankfein will face questions from the Senate Permanent Subcommittee on Investigations, which is looking into the causes of the housing meltdown, the source said.

In Craig, Goldman Sachs will have help from a lawyer with deep connections in Democratic circles.

Craig served as White House counsel during the first year of Obama’s presidency, but is seen as having been pushed out for his role in advocating a strict timeline for the closing of the U.S. detention facility at Guantanamo Bay. His departure frustrated many liberal Obama supporters who saw Craig as a strong advocate for undoing some of what they saw as the worst excesses of the Bush era.

But the source familiar with Goldman’s operations said Craig wasn’t hired just because he’s well-connected.

“It’s about advice and process,” the source said. “People will always leap to the conclusion that it’s about somebody’s Rolodex.”

Skadden declined to comment on Craig’s role with Goldman.

"A former White House employee cannot appear before any unit of the Executive Office of the President on behalf of any client for 2 years—one year under federal law and another year under the pledge pursuant to the January 2009 ethics E0," said a White House official.

The official also said that the White House had no contact with the SEC on the Goldman Sachs case. "The SEC by law is an independent agency that does not coordinate with the White House any part of their enforcement actions."

Whatever the reason for his hiring, Craig will presumably be a key player in the intricate counterattack Goldman Sachs officials in Washington and Manhattan improvised during the weekend — a plan that took clearer shape Monday as Britain and Germany announced that they might conduct their own investigations of the firm.

For three weeks, Goldman had planned to hold a conference call Tuesday to unveil its first-quarter earnings for shareholders. Shifting into campaign mode after the SEC’s surprise fraud filing, Goldman has moved the call up from 11 a.m. to 8 a.m. to try to get ahead of the day’s buzz. In an unusual addition, the firm’s chief counsel will be on the line to answer questions about the case, and Goldman is inviting policymakers and clients to listen to the earnings call themselves rather than rely on news reports.

Industry officials said the conference call — which will include, as originally planned, Chief Financial Officer David Viniar — will amount to a public unveiling of Goldman’s crisis strategy.

Well, Well, Well...looks like Lil Barry may have had his hand in the "cookie jar".

Lil Barry received $994,795 from Goldman Sachs in contributions. Now who is in bed with who???

Sachs stock price went UP today. They stand to gain hundreds of millions from Barry's proposed reform, and have openly pushed for its passage. Be Lil Barry's "Wall Street Demon" in return for a huge payday.

Elliott Spitzer {hardly a Conservative} said today that the timing of the SEC case is not coincidental....and that if the White House was in any way involved, it could be a criminal action.

“I used to be a mortgage banker Who bundled loans to be resold Until the market lost its anchor And set us back a billionfold. At first it happened quite mundanely; And then it clobbered us insanely: A tidal wave of subprime loans Deep-sixed us down to Davy Jones. We used to think we walked on water; But now we’re sunk beneath bad debt And know we need a safety net To help escape the coming slaughter Of banks which like the killer whale Were thought to be too big to fail.”

“I used to be a mortgage banker Who bundled loans to be resold Until the market lost its anchor And set us back a billionfold. At first it happened quite mundanely; And then it clobbered us insanely: A tidal wave of subprime loans Deep-sixed us down to Davy Jones. We used to think we walked on water; But now we’re sunk beneath bad debt And know we need a safety net To help escape the coming slaughter Of banks which like the killer whale Were thought to be too big to fail.”

I used to predict mortgage meltdowns ....oh well 1 yr 3 months 3 weeks til the next presidential straw poll in Ames Iowa.......whoever wins gets the press bandwagon.... guess we wont have to worry about this anymore since I am telling the whole state of Iowa to make all politicians use the word roommate instead of tax payer when it comes to mortgage problems.......the bankers may be in trouble .....but the people need to get out of their homes they shouldnt be in

This is how Goldman plays the game. Fearful they cannot win on the merits, they hire the Whitehouse's former lawyer.

First, Craig should have declined the representation and second, I would think that a judge would make him drop the case because of his former position and because of the obvious attempt on Goldman's part to exert undue political influence.

I'm sure there are as good if not better lawyers than Craig, choosing him over all others was just rubbing it our faces.

Obama and his administrationn is a joke. As far as I'm concerned he's contributed to the mess we are in and it won't be too soon to see him and his buddies voted out. Cheney & Bush are beginning to look like saints.

Obama and his administrationn is a joke. As far as I'm concerned he's contributed to the mess we are in and it won't be too soon to see him and his buddies voted out. Cheney & Bush are beginning to look like saints.

I will bet a dollar to a doughnut (hypothetically) that this is nothing but smoke and mirrors. They gave Obambi $994,795 samolians.

Either the guvment won't be able to find enough evidence to bring to trial, the evidence will be considered tainted (by accident of course), or once in trial the government will swear it has a slam dunk case (with the DEM congress shaking their POM POMS and the Repubs with their finger in their nose looking confused) then through some administrative error it will screw the pooch. But NO ONE IS GOING TO JAIL.

This is just a game for the administration to APPEAR to the AMERICAN people that it is fighting the corrupt FAT CAT bankers. (Enter the steanship whistle. OOOOOOOoooooo)

Did anyone listen when Ron Paul correctly and honestly said Obambi was a "CORPORATIST"?

If by some fluke there is a dog and pony show trial it will be all KISS KISS and no BANG BANG a little slap on the wrist fine (for MULTI-BILLIONAIRES) and a lot of LAME stream media fluff.

I will bet a dollar to a doughnut (hypothetically) that this is nothing but smoke and mirrors. They gave Obambi $994,795 samolians.

Either the guvment won't be able to find enough evidence to bring to trial, the evidence will be considered tainted (by accident of course), or once in trial the government will swear it has a slam dunk case (with the DEM congress shaking their POM POMS and the Repubs with their finger in their nose looking confused) then through some administrative error it will screw the pooch. But NO ONE IS GOING TO JAIL.

This is just a game for the administration to APPEAR to the AMERICAN people that it is fighting the corrupt FAT CAT bankers. (Enter the steanship whistle. OOOOOOOoooooo)

Did anyone listen when Ron Paul correctly and honestly said Obambi was a "CORPORATIST"?

If by some fluke there is a dog and pony show trial it will be all KISS KISS and no BANG BANG a little slap on the wrist fine (for MULTI-BILLIONAIRES) and a lot of LAME stream media fluff.